General Facts about the Minimum Wage

Raising the minimum wage to $10.10 an hour benefits 1.2 million low-wage workers and boosts the economy

 

A person in Pennsylvania working full-time, 40 hours a week, 52 weeks a year, earns only $15,080 annually, well below the poverty line for a family of two. Increasing the wage floor to $10.10 an hour and connecting the rate to inflation would increase the purchasing power of 1.2 million Pennsylvania workers and boost the state’s struggling economy.

 

 

The state minimum wage and the tipping minimum wage

                      

  • The minimum wage has remained at $7.25 an hour since 2009.
  • The minimum wage for tipped workers is only $2.83 an hour
  • Neither wage rises with inflation, meaning the purchasing power of workers is decreasing.

 

 

After adjusting for the change in prices, the minimum wage is worth less today than in 1968.

  • This decline is not due to economic necessity. Since 1968, the U.S. economy has expanded greatly and our ability to produce goods and services for the same amount of work has doubled.
  • However, the purchasing power of the minimum wage declined by 23% in the last 45 years.
  • The minimum wage would be $10.65 if it has risen at the same wage rate as the typical American worker and it would be $18.30 if the wage had grown with productivity.

 

Increasing the minimum wage to $10.10 an hour helps more than one million workers in Pennsylvania[1]

  • The vast majority (84%) of people who would see their wages go up are adults in the prime of their working years, not teenagers, as some have claimed.
  • Almost half (49%) of workers who will benefit from a minimum wage increase work full time and another third (32%) work more than 20 hours per week.

 

Eliminating the tipped minimum wage is critical

  • The tipped minimum wage at $2.83 has not changed since 1998.
  • When tips fall short, low-wage workers, who are predominantly women, have unstable incomes that fall short of minimum wage.
  • Tipped workers earn more in states with a higher tipped minimum wage and the gap in earnings between tipped workers and workers overall is smaller the higher the tipped minimum wage is in a state. In other words, a good way to reduce inequality in a state is to raise the tipped minimum wage.

 

Working families benefit from a $10.10 an hour minimum wage

  • The earnings of minimum wage workers are crucial to their families’ well-being. Nearly a quarter (24%) of the workers who would benefit from raising the minimum wage are parents with children.
  • The average parent working minimum wage brings home just over half of their family’s income.
  • Nearly one in five children (18%) have a parent who would be helped by raising the minimum wage to $10.10 an hour.

 

Raising the minimum wage will help close the wage gap for women

  • Nationwide women earn only 77 percent of what their male counterparts make – leaving a wage gap of 23 cents on the dollar.
  • The majority (56%) of workers getting a raise by increasing the minimum wage to $10.10 are women.
  • Women make up over three-quarters of the tipped workforce.
  • Raising the minimum wage is an important step towards fair pay for women – especially women of color.

 

Pennsylvania workers are falling behind those in other states

  • Already 29 states have raised their wage floor above Pennsylvania’s $7.25 an hour.
  • All of our surrounding states have a higher minimum wage. These include Ohio, New York, New Jersey, Delaware, West Virginia and Maryland.
  • The majority of Pennsylvania workers who would see their incomes rise are white (74%), along with 35% of Latino workers, 25% of African American workers would benefit and 29% of Asian workers.

Increasing the minimum wage will boost the state’s economy.

  • Pennsylvania’s economy needs a boost. Job growth has been weak since 2010 and the state ranked 48th in the nation last year. Slow job growth holds down wages for all of us.
  • One way to get the economy going again is to put more money in the hands of the lowest-paid workers. With more income, workers here will do things like have their car repaired at the local service station or make a long-delayed trip to the dentist.
  • Raising the minimum wage is a modest but important step towards creating an economy powered by good jobs.

 


[1] Unless otherwise noted the demographics of the workers affected by a minimum wage increase were drawn from David Cooper, Raising The Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide A Modest Economic Boost, Economic Policy Institute, Briefing Paper #371, December 2013, available at http://s2.epi.org/files/2013/minimum-wage-state-tables.pdf.

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